We wondered: when was the last time we saw a U.S. IPO price bump this much? Turns out you have to travel in the Silicon Valley way back machine to 2000. Avid readers will remember early 2000 was the precipice just before the tech bubble went pop. (Apologies for mixing our metaphors.)

Here is the rundown, based on data from our friends at Dealogic.

LinkedIn IPO: Initially priced at $32 to $35 a share earlier this month. Today, LinkedIn said it expects its shares to debut at between $42 and $45 apiece. Based on the halfway point of the two price ranges, LinkedIn’s IPO price was bumped up by nearly 30%.

Palm: Back in January 2000, the then-hot PDA company filed to make its stock debut at $14 to $16 per share. Within weeks, the price was revised to $30 to $32 per share – a 106.7% increase based on the midpoint share prices. The IPO eventually cast off March 1, 2000, at an even higher price of $38 a share. (Palm is now owned by Hewlett-Packard, which bought the struggling company last year for $5.70 a share. Ouch.)

Selectica Inc. On Feb. 1, 2000, the business-software company first floated an IPO priced at $9 to $11 a pop. In March, just ahead of the stock offering, Selectica boosted the price range to between $23 and $25 a share – a 140% increase. The IPO actually launched at $30. Today, Selectica trades at $5.17. Ouch again.

ArrowPoint Communications: Filed initial terms on March 9, 2000, to sell stock to the public at $15 to $17 a share. (This was one day before the Nasdaq peaked.) ArrowPoint weeks later bumped up the price range to $30-$32, or a 93.8% bump. Shortly after its debut, ArrowPoint sold itself to Cisco for roughly $6 billion, or about $143 a share.

If you think LinkedIn's IPO is a bubble, just wait until the Facebook IPO.

3:50 pm May 17, 2011

Anonymous wrote :

I am using LinkedIn for over six years, more for keeping or for getting back in touch with people I know. Not much else. Not a bad website, but I pay nothing, because the services offered are not worth much either. Yes, recruiting agencies are the most likely users that pay a certain amount for the services, but the reverse network externality effect (a fast growing number of headhunting / employment agencies will pay for a slow growing or stagnating amount of potential candidates, which, most likely, will hit the critical mass after which the paying customers will pull out due to inefficiency perception- the searches will show the same candidates to competing head hunters) will, eventually, slow the (expected fast) growth of this business. Plus, the “IPO winner’s curse” is at work too: if the IPO successful (which is highly unlikely), the “me too” companies/capital will jump in, as there is (almost) no sizable barrier to entry into this business, as there are also almost no costs to exiting this business either. Do I …..smell another DOT COM (E)-DOT GONE …in action?
$3.4 MM net after $243 MM in revenue? Losses are projected for the coming year/years? Resulting in ….$4 BILLION in (projected) market value?
With this set of financial data, I you were to attend a business school (any of them, even the lowest ranking one), most likely, you would flunk the Finance and / or Securities class, magna cum laudae ;-{ ))))))))))
$43/ share for LinkedIn’s IPO is the best joke I heard since the real estate “pundits” were touting that the housing market is strong, just a couple of weeks before the housing bubble burst.
I know that everybody’s waiting for the next Microsoft or Intel to come (…the Second Coming?!?!?!?!!, Just kiddin’!!!’). But do not hold your breath: LinkedIn is NOT the Chosen One.

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